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Former Binance CEO Changpeng Zhao, commonly known as CZ, has found himself at the epicenter of a new controversy following a recent report by the Financial Times regarding his Web3 and artificial intelligence (AI) venture, YZi Labs.
CZ Denies Financial Times Report
The report suggested that Zhao was planning to open a substantial $10 billion portfolio to outside investors, a claim that has sparked a vigorous denial from the former executive of the world’s largest cryptocurrency exchange.
According to the Financial Times, Ella Zhang, head of YZi Labs, acknowledged strong interest from potential investors, even mentioning that US Securities and Exchange Commission (SEC) Chair Paul Atkins had requested a private demonstration of the fund’s capabilities.
The Financial Times report indicated that approximately 70% of YZi Labs’ portfolio consists of digital assets, with more than 50 token proposals reviewed over the summer.
However, the former Binance executive took to social media platform X (formerly Twitter) to vehemently dispute the Financial Times’ claims, labeling the report as “complete false news” filled with what he described as “fake, wrong, and made-up information.”
Zhao made several specific assertions in his posts. He stated that YZi Labs is not currently raising an external fund, nor is there any planned demonstration for investors.
CZ expressed confusion over the concept of a “demo” for a fund and clarified that there has never been a pitch deck for YZi Labs, nor has the organization pursued any external investment discussions since its rebranding.
YZi Labs Not Linked To Binance
In his response, CZ further stated that YZi Labs operates independently from cryptocurrency exchange Binance and refuted claims that it was “spun out” of the exchange after his legal troubles with US authorities in November 2023.
Addressing regulatory concerns, Zhao pointed out that he has only been cited for a single violation related to the Bank Secrecy Act, which he clarified involved a failure to maintain an adequate anti-money laundering program. He sated:
I plead to a single violation of BSA, failure to maintain an adequate ANTI-money laundering program. Contrary to what FT characterized as “money laundering” violations.
The former Binance CEO stressed that his legal situation should not be conflated with accusations of money laundering, a distinction he feels is often misrepresented in traditional media.
Zhao also noted that the Financial Times had previously attempted to arrange a lunch interview with him, promising positive coverage. After canceling the meeting, he expressed his regret about the situation, suggesting that the resulting article was not the narrative he had hoped for.
At the time of writing, Binance’s native token, Binance Coin (BNB), trades above the $1,000 milestone, recording gains of 15% during this month’s uptrend.
Featured image from BBC, chart from TradingView.com
